Asda has confirmed plans to cut up to 500 jobs in stores and 250 at its head office in Leeds as the retailer battles to protect profits while sales slide.
The supermarket chain is to close staff canteens in all stores and axe some shopfloor services such as photo processing and pizza-making as part of a turnaround plan called Project Renewal.
Asda began consulting 5,000 store staff and about 1,000 head office personnel over potential changes to their jobs in January. On Wednesday, the retailer said the majority of those staff had been redeployed but about 200 store workers had already taken redundancy and up to a further 300 were likely to go – less than the 1,000 feared. About 250 jobs are going at its head office in Leeds – slightly more than the 200 expected.
Asda said that after consultation with staff about canteen closures it would be offering free tea and coffee in all stores and giving workers an extra 10% discount on takeaway food, such as sandwiches, on top of their regular 10% staff discount. The company previously attracted heavy criticism with plans to eliminate the morning perk of free tea and toast handed out to staff across 230 stores.
The supermarket is looking for ways to trim costs as it battles against discounters Aldi and Lidl, which have undermined its position as the UK’s cheapest supermarket. Andy Clarke, its chief executive, has said he wants to halve the price gap with the German chains to 5% over the next two years under his Project Renewal scheme.
Last month, Asda revealed its worst-ever quarterly sales fall – with sales down 5.8% at established stores in the 13 weeks to 1 January. It was the sixth consecutive quarter of declining sales for Asda and marked it as the worst performer of all the major grocers over the all-important Christmas period.
Clarke said: “This is a business in financial control and in charge of the decisions we are making not a business in crisis.”
But he warned that Asda was likely to see continuing falls in underlying sales this year at it steps up price cuts and steers clear of heavy discounts in its attempt to win over shoppers in the long term.
Asda said: “We have announced big changes in the way we run our business and some of these changes have inevitably impacted a small proportion of our 140,000 UK colleagues ... With flexibility on both sides we have been able to achieve the necessary changes with the active support of staff.”
Asda’s job cuts come after Tesco chief executive Dave Lewis warned that retail jobs were at risk from rising costs. He threw his weight behind a report by the British Retail Consortium that said there could be 900,000 fewer jobs in retail by 2025 as costs including business rates and the national minimum wage rise.
Tesco, Morrisons and Sainsbury’s have all cut staff in the past few years as they have been forced to cut prices to take on the discounters.
guardian.co.uk © Guardian News and Media Limited 2010